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You may be surprised to find out that there is more money involved in owning a house than just taking out a home loan and making your monthly payments. What you weren’t responsible for as a renter becomes all yours as a homeowner. Property taxes, utilities, home maintenance and repairs, insurance and even decorating in any way you choose are all on you now, for better or worse. And if you live in an association or in other types of communities where special property taxes are assessed, you’ll have to contend with that, too. Below is a list of some of the costs broken down.

Closing Costs

Closing costs can add on thousands of dollars when your loan is settled. Those fees are often negotiated and vary state-by-state. As a buyer, you may be responsible for a portion of them or the seller may assume all of them. The expense may be written into the offer so that the buyer doesn’t have to come up with the cash.  Remember, there is room for negotiation so be prepared when going into the closing meeting and be knowledgeable about the process.  It’s much easier (and effective) when you are prepared.

Property Taxes

Your property taxes are the principal source of revenue for municipalities, counties and school districts. The United States average for property taxes is 1.38 percent of the home’s value with the highest rates in New Jersey, Connecticut, New Hampshire, New York and Rhode Island and the lowest in Louisiana, Alabama, West Virginia, Mississippi, and Arkansas. Additionally, there are variances within counties, parishes, boroughs and the like.  To make sure your taxes are in line with other homes in your municipality, have a professional property appraiser like Abbe Edleman, provide a property appraisal. If you live in a condo or a community that assesses its residents a special tax, you will have fees on top of your property taxes.Talk with the institution that will hold the mortgage are and budget accordingly. Otherwise, you’ll have a shock when those taxes and fees become due.

Homeowners Insurance

You can’t get a loan without taking out homeowner’s insurance, but that doesn’t cover everything, especially if you live in an area where natural disasters occur. You should consider supplemental policies for floods, tornados, hurricanes and earthquakes.  The mortgage holder determines if you will need flood insurance based on their demographic determination of previous history.  If you live in a flood zone, you will be required to carry flood insurance or the mortgage will not be granted. If you have a lot of valuable items, such as jewelry, antiques, art or a lot of expensive equipment like computers or cameras, you’ll need to buy a rider if you want them covered.

Decorating

One of the most satisfying things about home ownership is the ability to make your house look just about any way you want it. You can change the appearance of a house with something as simple as paint or as elaborate as a remodel. A new house generally needs furniture and other items like window treatments, carpeting and light fixtures.  Your decorating costs are directly related to your tastes and expectations so budget accordingly.

Home Maintenance and Repairs

This is a subject that is not only a hidden cost but will remain a continual cost as long as you are a home owner.  If you bought a fixer-upper, you pretty much know what’s ahead of you. Time, sweat and money. Your eyes will be the best compass to determine the amount of improvements needed.  Even a house in pristine move-in condition is going to eventually need maintenance. There will come the day – maybe not now (depending on how long you stay in the house) that the roof will need to be replaced or the furnace breaks down or something goes terribly wrong with the plumbing. Ouch, these are a few of repairs that hurt your wallet.  Your choice is to repair or replace. If you’re handy at DIY, you have an advantage, but you’ll still need to spend some money. Don’t be too startled if every year you have some sort of major expense, sometimes costing more than you expected to spend in repairs for the coming year. To take the sting out of those unexpected expenditures, start a savings account for your house. It’s important to maintain your house. To sell your house for the best price, you want to show a well-maintained home, not a neglected house.  Maintenance and repairs can be a subject on its own for another article.